Faltering Friday – G7 Meeting Gets Off to a Rocky Start

How would you feel about a guy who treats our neighbor and most trusted ally this way...

Oh Donald!

The President of the United States started the day off with a math error, saying we had unfair trade deals with the G7 when we are one of the G7 so that's 6 countries we have deals with and then there's US. While we can't expect the President to do complex math first thing in the morning, we could expect him to be more civil to other World Leaders and…. oh, who are we kidding, we can't expect him to act civilly either, can we?

Of course, Trump has to look like he's taking a tough stance and not trying too hard to make a deal because the other 6 World Leaders are firmly against him and this folks, is the weekend when Putin wins and the US officially breaks with it's former allies, who will stay another day and talk behind our backs and issue a joint communique minus the US for the first time ever.

How would you feel about a guy who treats our neighbor and most trusted ally this way:

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Imagine spending you life as a politician and working your way into becoming a respected political leader – only to be insulted on twitter by this troll! Trump isn't even planning on staying for the whole summit kind of drove home the point that he's a complete asshole, which finally spooked investors. Keep in mind the Kim meeting is the 12th and today's the 8th and Trump has his own plane so using that as a reason to leave the the G7 early is a real dick move and a huge dis to the rest of the World leaders, who cleared their calendars until Sunday for the annual meeting that used to be considered the most important political event in the World.

As we expected, the markets are tumbling but because the reason they are tumbling is that Donald Trump is as bad as we expect, the readers at Seeking Alpha didn't get to seeyesterday morning's PSW Report, where we said this was why we would shorting into the rally ahead of the meeting, because we were critical of the President and that's apparently unacceptable at SA, who want to keep politics out of investing.

Nasdaq (/NQ) Futures short at 7,200, out at 7,120 for a gain of $1,600 per contract

S&P (/ES) Futures short at 2,780, out at 2,763 for a gain of $850 per contract

Russell (/TF) Futures short at 1,680, out at 1,666 for a gain of $900 per contract

That's not bad for a day's work and we don't want to risk it as G7 rumors can blast the market in either direction but, on the whole, we're sticking with our DXD hedge, which predicts the Dow will finish below 25,200 into expiration day on July 20th. If we are going to re-short this morning, 25,200 would be the line we'll be watching.

Meanwhile, former Fed Chairman Ben Bernanke agrees with me, saying "the US Economy faces a Wile E. Coyote moment in 2020" certainly after seeing this cartoon, which I posted in Wednesday's Live Member Chat Room. It's that moment when you've already gone off the cliff and you realize you've gone off the cliff but it's too late to do anything about it other than brace for the fall.

Bernanke says fading stimulus will remove the supports from the economy and the $1.5Tn tax cuts leave the Government unable to step in and help. “*What you are getting now is a stimulus at the very wrong moment*,” [Bernanke said Thursday during a policy discussion at the American Enterprise Institute](https://www.bloomberg.com/news/articles/2018-06-07/bernanke-says-u-s-economy-faces-wile-e-coyote-moment-in-2020), a Washington think tank. “*The economy is already at full employment*.” The Congressional Budget Office forecast in April that the stimulus would lift growth to 3.3 percent this year and 2.4 percent in 2019, compared with 2.6 percent in 2017. GDP growth slows to 1.8 percent in 2020 in the CBO projections**.

Keep in mind we're running a $1.3Tn deficit, which is 6.66% of our $19.5Tn GDP (Trump's signal to Lord Satan?) and if you can't grow your economy 3.3% while borrowing 6.6% – then you really do suck at this economic stuff!